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Liquidator pursues Obeid family for $700,000 over Circular Quay profits

Liquidator pursues Obeid family for $700,000 over Circular Quay profits

SMH News. Story by, Kate McClymont and Michaela Whitbourn. Photo shows, Eddie Obeids wife, Judith Obeid leaves the Supreme Court, Sydney with one of her daughters.Photo by, Peter Rae Monday 10 April, 2017As Eddie Obeid languishes behind bars for a second Christmas and New Year, the family of the corrupt former Labor MP is being pursued in court for hundreds of thousands of dollars in cash they received from the Circular Quay cafes at the centre of his trial.

Fairfax Media can reveal the liquidator appointed to Circular Quay Restaurants, the failed front company which ran the cafes, is suing the Obeid family patriarch, his wife Judith and five of their nine children in the District Court for just over $708,000.

The figure includes $433,382 in cash payments the family members allegedly received from the businesses, plus interest and costs.

Circular Quay Restaurants, which operated three cafes on or near the bustling ferry wharves at the quay, went into liquidation in 2014 owing taxpayers almost $1 million in unpaid rent and other costs.

Obeid snr, who spent 20 years in the state’s upper house, was jailed in December 2016 for lobbying a senior NSW Maritime Authority bureaucrat in 2007 to secure favourable conditions for tenants at Circular Quay without revealing his family had a financial interest in the cafes.

In a circular to creditors dated November 28, 2017, Circular Quay Restaurants liquidator Frank Lo Pilato said he conducted public examinations of the company’s current and former directors, its professional advisers and members of the Obeid family in August 2016 and March and April this year.

“During the course of the public examinations evidence was given that cash payments totalling $433,382 were made to members of the Obeid family in the years preceding the liquidation of the company,” Mr Lo Pilato, a managing partner at RSM Australia, said.

As a result of the evidence, he launched proceedings in the District Court against the Obeid family members who received the payments. Mr Lo Pilato said he was also taking action against a former director of the company, Obeid’s brother-in-law John Abood, “for breach of his statutory duties as a director and officer of the company”.

The Obeid children named in the District Court action are Moses Obeid, his older brother Damien and younger brothers Gerard and Eddie junior, along with their sister Gemma.

Obeid snr’s criminal trial followed an Independent Commission Against Corruption inquiry into the cafe leases, which was in turn sparked by a Walkley Award-winning Herald investigation in 2012 exposing the Obeid family’s secret interest in the cafes.

During a liquidator’s examination in April, Judith Obeid described her occupation as “home duties” and agreed she was given $1000 in cash a week from the takings of the businesses. She said she spent the money on items “for the home and for the family”.

Asked who was running the cafes, Mrs Obeid insisted she “really had no knowledge of my sons’ business whatsoever”.

“I have a large family. My dedication was to my nine married children and 33 grandchildren,” she told the Supreme Court.

“I am a hands-on mother and hands-on grandmother. I had no time whatsoever to get involved. That’s the honest truth.”

Asked if she had her own bank account, Mrs Obeid replied: “Not to my knowledge.”

Mr Maroon was asked during a liquidator’s examination if he subsequently wrote an email apologising to Eddie Obeid’s lawyers for finding the records.

“What were you apologising for in that sentence? The monumental ‘expletive’ thing you had done?” the liquidator’s lawyer, Jim Harrowell, asked Mr Maroon. Mr Maroon replied it was “over a year ago” and he could not recall.

The liquidator’s action, scheduled for a pre-trial hearing on January 15, is not the only legal headache for the Obeid clan. The family is also locked in a long-running Federal Court battle with the Australian Taxation Office over bills totalling $8.6 million, which were sent to the family in August 2013 following an audit of Obeid snr and a complex web of family trusts and companies.

This story Administrator ready to work first appeared on Nanjing Night Net.